The cryptographic systems protecting Bitcoin and other blockchain networks could be compromised by emerging technologies such as quantum computing, according to a regulatory filing submitted by asset manager BlackRock.
A detailed overview of the threats posed by quantum computing was added to the risk disclosure section of its Bitcoin ETF’s regulatory filing by the asset manager.
On May 9, the registration statement for the iShares Bitcoin ETF (IBIT) was updated by BlackRock, with the amended document highlighting potential threats to the security of the Bitcoin network posed by quantum computing, according to the filing.
It was stated by BlackRock that if advancements are made in quantum computing technology, the effectiveness of numerous cryptographic algorithms used globally—particularly those securing digital assets such as Bitcoin—could potentially be undermined.
This risk was explicitly highlighted for the first time in IBIT disclosures by the asset manager. The IBIT ETF has been identified as the largest spot Bitcoin ETF, holding around $64 billion in net assets, as reported on its website.
The principles of quantum mechanics are being utilized by the emerging field of quantum computing to significantly boost the processing power of computers.
Unprecedented Capital Inflows
It was cautioned by James Seyffart, an analyst at Bloomberg Intelligence, that risk disclosures like those in IBIT are mandated to outline all conceivable threats to an asset, including those deemed highly improbable.
In a May 9 post on X, it was stated by Seyffart that any potential issue related to a listed product or its underlying asset is required to be highlighted, which is entirely standard practice and, in his view, completely reasonable.
Since their introduction in January, over $41 billion in net inflows have been drawn by Bitcoin ETFs collectively, based on data provided by Farside Investors.
On May 8, all-time highs of approximately $40 billion in net inflows were exceeded by Bitcoin ETFs, according to Bloomberg Intelligence.
In a May 9 post on X, it was remarked by Bloomberg Intelligence analyst Eric Balchunas that lifetime net flows are the most important metric to monitor, as they are difficult to accumulate and reflect genuine performance. It was noted as impressive that a new peak was reached so quickly after widespread concerns about potential market collapse.
In February, a prediction was made by Tether CEO Paolo Ardoino that quantum computing could one day allow hackers to access inactive Bitcoin wallets and retrieve the dormant funds.
It was stated by Ardoino in a Feb. 8 post on X that any Bitcoin held in lost wallets, including those belonging to Satoshi (if no longer living), would be accessed through hacking and returned to circulation.
